Indian crypto exchange CoinDCX valuation doubles to $2.2 billion

Indian crypto exchange CoinDCX raised $135 million in a Series D round of funding, doubling its valuation to $2.15 billion just eight months after raising its last round.

• Pantera and Steadview Capital led the round and were joined by Coinbase Ventures, Kingsway, DraperDragon, Republic and Kindred Ventures.

Why it matters: Investors are still bullish on crypto startups in India, despite new tax rules and payments hurdles that have hampered trading in the market.

Flashback: CoinDCX became India's first crypto unicorn last August, when it raised $90 million in Series C funding at a $1.1 billion valuation.

• The company has raised $245 million to date, according to Crunchbase.

State of play: On April 1, India began taxing income from the transfer of virtual assets by 30%. And in July, it plans to institute a 1% tax deducted at source for any digital asset transaction.

• Even though the 1% transaction tax hasn't gone into effect, the new rules have slowed crypto trading volumes, particularly among high-frequency traders.
• Meanwhile, Indian payment providers have stopped processing crypto transactions via India's Unified Payments Interface (UPI), making it more difficult to get money into exchanges.

The intrigue: Coinbase Ventures, an investor in CoinDCX since its Series A, continues to pour money into the company — even as its parent company aggressively pushes into the Indian market.

• Coinbase debuted its crypto trading service in India two weeks ago, only to suspend support for UPI trades just a few days later.

• The U.S. exchange has already hired 300 employees there, but in a blog post earlier this month, CEO Brian Armstrong said it planned to expand its headcount in India to more than 1,000.
• But Coinbase is no stranger to co-opetition — the company has invested $250 million in Indian startups through its venture arm, including competing exchange CoinSwitch Kuber.

The bottom line: Venture investors are betting that short-term hurdles for Indian crypto adoption will be overcome, as the market is just too large to ignore.